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LOANS HELD FOR INVESTMENT
 12 Months Ended
Dec. 31, 2025
LOANS HELD FOR INVESTMENT [Abstract]  
LOANS HELD FOR INVESTMENT
4.  LOANS HELD FOR INVESTMENT

Loans held for investment are summarized by category at year-end as follows (dollars in thousands):

   
December 31,
2025
    
December 31,
2024
  
Commercial real estate
  
$
1,064,625
    
$
1,119,063
  
Commercial - specialized
    
409,351
      
388,955
  
Commercial - general
    
659,323
      
557,371
  
Consumer:
                
1-4 family residential
    
589,851
      
566,400
  
Auto loans
    
259,157
      
254,474
  
Other consumer
    
62,092
      
64,936
  
Construction
    
100,103
      
103,855
  
     
3,144,502
      
3,055,054
  
Allowance for credit losses on loans
    
(45,131
)
    
(43,237
)
Loans, net
  
$
3,099,371
    
$
3,011,817
  

The Company has certain lending policies, underwriting standards, and procedures in place that are designed to maximize loan income with an acceptable level of risk. Management reviews and approves these policies, underwriting standards, and procedures on a regular basis and makes changes as appropriate. Management receives frequent reports related to loan originations, quality, concentrations, delinquencies, non-performing, and potential problem loans. Diversification in the loan portfolio is a means of managing risk associated with fluctuations in economic conditions, both by type of loan and geography.

Commercial Real Estate – Underwriting standards have been designed to determine whether the borrower possesses sound business ethics and practices, evaluate current and projected cash flows to determine the ability of the borrower to repay their obligations as agreed and ensure appropriate collateral is obtained to secure the loan. Commercial real estate loans are underwritten primarily based on projected cash flows for income-producing properties and collateral values for non-income-producing properties. The repayment of these loans is generally dependent on the successful operation of the property securing the loans or the sale or refinancing of the property. Real estate loans may be adversely affected by conditions in the real estate markets or in the general economy. The properties securing the Company’s real estate portfolio are diversified by type and geographic location. This diversity helps reduce the exposure to adverse economic events that affect any single market or industry.

Commercial – General and Specialized – Commercial loans are underwritten after evaluating and understanding the borrower’s ability to operate profitably. Underwriting standards have been designed to determine whether the borrower possesses sound business ethics and practices, evaluate current and projected cash flows to determine the ability of the borrower to repay their obligations, as agreed and ensure appropriate collateral is obtained to secure the loan. Commercial loans are primarily made based on the identified cash flows of the borrower and, secondarily, on the underlying collateral provided by the borrower. Most commercial loans are secured by the assets being financed or other business assets, such as real estate, accounts receivable, or inventory, and typically include personal guarantees. Owner-occupied real estate is included in commercial loans, as the repayment of these loans is generally dependent on the operations of the commercial borrower’s business rather than on income-producing properties or the sale of the properties. Commercial loans are grouped into two distinct sub-categories: specialized and general. Commercial related segments that are considered “specialized” include agricultural production and real estate loans, energy loans, and finance, investment, and insurance loans. Commercial related segments that contain a broader diversity of borrowers, sub-industries, or serviced industries are grouped into the “general category.” These include goods, services, restaurant & retail, construction, and other industries. Performance of these loans is subject to operating and cash flow results of the borrower, with risk in the volatility of operating results for particular industries.
Consumer – Loans to consumers include 1-4 family residential loans, auto loans, and other loans for recreational vehicles or other purposes. The Company utilizes a computer-based credit scoring analysis to supplement its policies and procedures in underwriting consumer loans. The Company’s loan policy addresses types of consumer loans that may be originated and the collateral, if secured, which must be perfected. The relatively smaller individual dollar amounts of consumer loans that are spread over numerous individual borrowers also minimizes the Company’s risk. The Company generally requires mortgage title insurance and hazard insurance on 1-4 family residential loans. All consumer loans are generally dependent on the risk characteristics of the borrower’s ability to repay the loan, a consideration of the debt to income ratio, employment and income stability, the loan-to-value ratio, and the age, condition and marketability of the collateral.

Construction – Loans for residential construction are for single-family properties to developers, builders, or end-users. These loans are underwritten based on estimates of costs and completed value of the project. Funds are advanced based on estimated percentage of completion for the project. Performance of these loans is affected by economic conditions as well as the ability to control costs of the projects.

The commercial real estate and construction categories comprise the Company’s nonowner-occupied real estate loans. Total nonowner-occupied real estate loans were $1.16 billion at December 31, 2025, and $1.22 billion at December 31, 2024.

The following tables detail the activity in the ACL for loans for the years ended December 31, 2025, 2024, and 2023 (dollars in thousands). Allocation of a portion of the ACL to one category of loans does not preclude its availability to absorb losses in other categories.

   
Beginning
Balance
    
Provision for
Credit Losses
    
Charge-
offs
    
Recoveries
    
Ending
Balance
  
For the year ended December 31, 2025
                              
Commercial real estate
  
$
15,973
    
$
(218
)
  
$
(541
)
  
$
—
    
$
15,214
  
Commercial - specialized
    
4,640
      
464
      
—
      
127
      
5,231
  
Commercial - general
    
6,874
      
1,050
      
(883
)
    
407
      
7,448
  
Consumer:
                                        
1-4 family residential
    
9,677
      
1,592
      
(307
)
    
141
      
11,103
  
Auto loans
    
3,015
      
1,165
      
(1,349
)
    
202
      
3,033
  
Other consumer
    
1,115
      
868
      
(1,066
)
    
233
      
1,150
  
Construction
    
1,943
      
4
      
—
      
5
      
1,952
  
   
$
43,237
    
$
4,925
    
$
(4,146
)
  
$
1,115
    
$
45,131
  
For the year ended December 31, 2024
                                        
Commercial real estate
  
$
15,808
    
$
207
    
$
(87
)
  
$
45
    
$
15,973
  
Commercial - specialized
    
4,020
      
540
      
—
      
80
      
4,640
  
Commercial - general
    
6,391
      
1,393
      
(1,082
)
    
172
      
6,874
  
Consumer:
                                        
1-4 family residential
    
9,177
      
669
      
(175
)
    
6
      
9,677
  
Auto loans
    
3,601
      
465
      
(1,186
)
    
135
      
3,015
  
Other consumer
    
968
      
1,204
      
(1,257
)
    
200
      
1,115
  
Construction
    
2,391
      
(138
)
    
(315
)
    
5
      
1,943
  
   
$
42,356
    
$
4,340
    
$
(4,102
)
  
$
643
    
$
43,237
  

   
Beginning
Balance
    
Impact of
CECL
Adoption
    
Provision for
Credit Losses
    
Charge-
offs
    
Recoveries
    
Ending
Balance
  
For the year ended December 31, 2023
                                    
Commercial real estate
  
$
13,029
    
$
827
    
$
1,952
    
$
—
    
$
—
    
$
15,808
  
Commercial - specialized
    
3,425
      
33
      
398
      
(11
)
    
175
      
4,020
  
Commercial - general
    
9,215
      
(2,574
)
    
42
      
(469
)
    
177
      
6,391
  
Consumer:
    

             

     

     

     

 
1-4 family residential
    
6,194
      
1,700
      
1,278
      
(1
)
    
6
      
9,177
  
Auto loans
    
3,926
      
(332
)
    
698
      
(888
)
    
197
      
3,601
  
Other consumer
    
1,376
      
(235
)
    
688
      
(1,140
)
    
279
      
968
  
Construction
    
2,123
      
683
      
(96
)
    
(319
)
    
—
      
2,391
  
   
$
39,288
    
$
102
    
$
4,960
    
$
(2,828
)
  
$
834
    
$
42,356
  

During the years ended December 31, 2025, 2024, and 2023 the Company recorded a provision for credit loss of $5.2 million, $4.3 and $4.6 million, respectively, which was comprised of a provision for credit losses on loans of $4.9 million, $4.3 million, and $5.0 respectively, and a provision for off-balance sheet credit exposures of $270 thousand, $(40) thousand, and $(350) thousand, respectively.
The following table shows the Company’s amortized cost and related ACL for individually evaluated collateral dependent loans by class using the fair value of collateral loss estimation methodology of evaluating expected credit losses at the dates indicated (dollars in thousands).
   
Equipment
    
Real Estate
    
Accounts
Receivable
    
Total Loans
Individually
Evaluated
    
Total ACL
for
Individually
Evaluated
Loans
  
December 31, 2025
                              
Commercial real estate
  
$
462
    
$
941
    
$
—
    
$
1,403
    
$
112
  
Commercial - specialized
    
289
      
255
      
—
      
544
      
—
  
Commercial - general
    
1,086
      
2,869
      
—
      
3,955
      
275
  
Consumer:
                                        
1-4 family residential
    
—
      
—
      
—
      
—
      
—
  
Auto loans
    
—
      
—
      
—
      
—
      
—
  
Other consumer
    
—
      
—
      
—
      
—
      
—
  
Construction
    
—
      
—
      
—
      
—
      
—
  
   
$
1,837
    
$
4,065
    
$
—
    
$
5,902
    
$
387
  
                                         
December 31, 2024
                                        
Commercial real estate
  
$
—
    
$
19,543
    
$
—
    
$
19,543
    
$
552
  
Commercial - specialized
    
—
      
—
      
—
      
—
      
—
  
Commercial - general
    
—
      
—
      
—
      
—
      
—
  
Consumer:
                                        
1-4 family residential
    
—
      
—
      
—
      
—
      
—
  
Auto loans
    
—
      
—
      
—
      
—
      
—
  
Other consumer
    
—
      
—
      
—
      
—
      
—
  
Construction
    
—
      
1,575
      
—
      
1,575
      
—
  
   
$
—
    
$
21,118
    
$
—
    
$
21,118
    
$
552
  

The table below provides an age analysis on accruing past-due loans and nonaccrual loans at the dates indicated (dollars in thousands):

   
30-89 Days
Past Due
    
90 Days or
More Past
Due
    
Total
Nonaccrual
    
Nonaccrual
with no
ACL
  
December 31, 2025
                        
Commercial real estate
  
$
2,241
    
$
206
    
$
1,402
    
$
54
  
Commercial - specialized
    
264
      
50
      
699
      
544
  
Commercial - general
    
1,173
      
31
      
4,108
      
—
  
Consumer:
                                
1-4 Family residential
    
1,221
      
1,750
      
845
      
—
  
Auto loans
    
395
      
40
      
—
      
—
  
Other consumer
    
765
      
80
      
16
      
—
  
Construction
    
455
      
578
      
—
      
—
  
   
$
6,514
    
$
2,735
    
$
7,070
    
$
598
  
                                 
December 31, 2024
                                
Commercial real estate
  
$
594
    
$
96
    
$
19,543
    
$
—
  
Commercial - specialized
    
1,770
      
240
      
105
      
—
  
Commercial - general
    
1,374
      
244
      
180
      
—
  
Consumer:
                                
1-4 Family residential
    
1,966
      
1,042
      
676
      
—
  
Auto loans
    
1,004
      
114
      
—
      
—
  
Other consumer
    
1,125
      
185
      
23
      
—
  
Construction
    
95
      
—
      
1,575
      
1,575
  
   
$
7,928
    
$
1,921
    
$
22,102
    
$
1,575
  
Credit Quality Indicators
The Company grades its loans on a thirteen-point grading scale. These grades fit in one of the following categories: (i) pass, (ii) special mention, (iii) substandard, (iv) doubtful, or (v) loss. Loans categorized as loss are charged-off immediately. The grading of loans reflects a judgment by the Company about the risks of default associated with the loan. The Company reviews the grades on loans as part of the Company’s on-going monitoring of the credit quality of the loan portfolio. These risk ratings are assigned based on relevant information about the ability of the borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors.

Pass loans have financial factors or nature of collateral that are considered reasonable credit risks in the normal course of lending and encompass several grades that are assigned based on varying levels of risk, ranging from credits that are secured by cash or marketable securities, to watch credits which have all the characteristics of an acceptable credit risk but warrant more than the normal level of monitoring.

Special mention loans have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of repayment prospects for the loans at some future date.

Substandard loans are inadequately protected by the current net worth and paying capacity of the borrower or by the collateral pledged, if any. These loans have a well-defined weakness or weaknesses that jeopardize collection and present the distinct possibility that some loss will be sustained if the deficiencies are not corrected. A protracted workout on these credits is a distinct possibility. Prompt corrective action is therefore required to strengthen the Company’s position, and/or to reduce exposure and to assure that adequate remedial measures are taken by the borrower. Credit exposure becomes more likely in such credits and a serious evaluation of the secondary support to the credit is performed. Substandard loans can be accruing or can be nonaccrual depending on the circumstances of the individual loans.

Doubtful loans have all the weaknesses inherent in substandard loans with the added characteristics that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions, and values highly questionable and improbable. All doubtful loans are on nonaccrual.

In connection with the review of the Company’s loan portfolio, management considers risk elements attributable to particular loan type or categories in assessing the quality of individual loans. The list of loans to be analyzed for individual evaluation consists of non-accrual loans over $250 thousand. Interest income recognized using a cash-basis method on non-accrual loans for the year ended December 31, 2025 was not significant. In addition, the Company closely monitors substandard accruing loans over $1 million, and past due accruing loans over $100 thousand for possible individual evaluation. All other loans will be evaluated collectively in designated pools unless a loss exposure has been identified. Additional funds committed to be advanced on individually analyzed loans are not significant.

The following tables reflect the amortized cost basis in loans by credit quality indicator and origination year at the dates indicated, and gross charge-offs for the years ended December 31, 2025 and 2024, excluding loans held for sale. Loans acquired are shown in the table by origination year. The Company had an immaterial amount of revolving loans converted to term loans at December 31, 2025 and 2024.

                     
Term Loans
                    
               
Amortized Cost Basis by Origination Year
              

 
December 31, 2025
  
(Dollars in thousands)
                                                
   
2025
    
2024
    
2023
    
2022
    
2021
    
Prior
     Revolving Loans    
Total
  
                                                 
Commercial real estate:
                                                
Pass
  
$
209,948
    
$
137,602
    
$
195,747
    
$
245,012
    
$
95,319
    
$
143,422
    
$
5,372
    
$
1,032,422
  
Special mention
    
—
      
2,825
      
7,343
      
81
      
166
      
1,095
      
483
      
11,993
  
Substandard
    
360
      
62
      
5,101
      
1,613
      
7,095
      
5,979
      
—
      
20,210
  
Total commercial real estate loans
  
$
210,308
    
$
140,489
    
$
208,191
    
$
246,706
    
$
102,580
    
$
150,496
    
$
5,855
    
$
1,064,625
  
Year-to-date gross charge-offs
  
$
—
    
$
—
    
$
541
    
$
—
    
$
—
    
$
—
    
$
—
    
$
541
  
                                                                 
Commercial - specialized:
                                                                
Pass
  
$
122,003
    
$
35,559
    
$
38,159
    
$
24,081
    
$
32,943
    
$
29,452
    
$
103,491
    
$
385,688
  
Special mention
    
4,572
      
8,076
      
799
      
1,042
      
1,734
      
830
      
3,770
      
20,823
  
Substandard
    
—
      
194
      
570
      
811
      
1,206
      
59
      
—
      
2,840
  
Total commercial - specialized loans
  
$
126,575
    
$
43,829
    
$
39,528
    
$
25,934
    
$
35,883
    
$
30,341
    
$
107,261
    
$
409,351
  
Year-to-date gross charge-offs
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
  
                                                                 
Commercial - general:
                                                                
Pass
  
$
178,827
    
$
103,310
    
$
51,335
    
$
84,327
    
$
43,179
    
$
79,605
    
$
92,158
    
$
632,741
  
Special mention
    
60
      
2,110
      
12,127
      
—
      
1,011
      
473
      
—
      
15,781
  
Substandard
    
40
      
758
      
1,615
      
1,281
      
5,749
      
1,116
      
242
      
10,801
  
Total commercial - general loans
  
$
178,927
    
$
106,178
    
$
65,077
    
$
85,608
    
$
49,939
    
$
81,194
    
$
92,400
    
$
659,323
  
Year-to-date gross charge-offs
  
$
—
    
$
245
    
$
164
    
$
116
    
$
63
    
$
245
    
$
50
    
$
883
  
                                                                 
Consumer: 1-4 family residential:
                                                                
                                                                 
Pass
  
$
95,677
    
$
69,844
    
$
92,148
    
$
137,702
    
$
77,474
    
$
96,393
    
$
4,010
    
$
573,248
  
Special mention
    
—
      
—
      
621
      
428
      
5,061
      
—
      
—
      
6,110
  
Substandard
    
214
      
3,095
      
1,573
      
1,067
      
604
      
3,940
      
—
      
10,493
  
Total consumer: 1-4 family residential loans
  
$
95,891
    
$
72,939
    
$
94,342
    
$
139,197
    
$
83,139
    
$
100,333
    
$
4,010
    
$
589,851
  
Year-to-date gross charge-offs
  
$
—
    
$
—
    
$
31
    
$
—
    
$
215
    
$
61
    
$
—
    
$
307
  
                                                                 
Consumer: auto loans:
                                                                
Pass
  
$
115,240
    
$
48,236
    
$
42,397
    
$
39,896
    
$
11,045
    
$
2,015
    
$
—
    
$
258,829
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
    
—
      
44
      
70
      
122
      
75
      
17
      
—
      
328
  
Total consumer: auto loans
  
$
115,240
    
$
48,280
    
$
42,467
    
$
40,018
    
$
11,120
    
$
2,032
    
$
—
    
$
259,157
  
Year-to-date gross charge-offs
  
$
29
    
$
243
    
$
367
    
$
477
    
$
198
    
$
35
    
$
—
    
$
1,349
  
                                                                 
Consumer: other consumer:
                                                                
Pass
  
$
27,912
    
$
12,521
    
$
6,704
    
$
7,014
    
$
2,223
    
$
4,096
    
$
1,534
    
$
62,004
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
    
16
      
13
      
—
      
16
      
10
      
33
      
—
      
88
  
Total consumer: other consumer loans
  
$
27,928
    
$
12,534
    
$
6,704
    
$
7,030
    
$
2,233
    
$
4,129
    
$
1,534
    
$
62,092
  
Year-to-date gross charge-offs (1)
  
$
510
    
$
203
    
$
44
    
$
107
    
$
49
    
$
152
    
$
1
    
$
1,066
  
                                                                 
Construction:
                                                
Pass
  
$
71,154
    
$
24,768
    
$
2,505
    
$
570
    
$
—
    
$
—
    
$
—
    
$
98,997
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
    
—
      
—
      
1,106
      
—
      
—
      
—
      
—
      
1,106
  
Total construction loans
  
$
71,154
    
$
24,768
    
$
3,611
    
$
570
    
$
—
    
$
—
    
$
—
    
$
100,103
  
Year-to-date gross charge-offs
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
  

(1) Includes $498 thousand in charged-off demand deposit overdrafts reported as 2025 originations.
                     
Term Loans
                    
               
Amortized Cost Basis by Origination Year
              
   
December 31, 2024
  
(Dollars in thousands)
  
2024
    
2023
    
2022
    
2021
    
2020
    
Prior
     
Revolving Loans
     
Total
  
 
                                                 
Commercial real estate:
                                                
Pass
  
$
164,205
    
$
233,047
    
$
300,828
    
$
126,548
    
$
43,628
    
$
175,319
    
$
6,417
    
$
1,049,992
  
Special mention
    
—
      
—
      
—
      
32,243
      
441
      
5,464
      
483
      
38,631
  
Substandard
    
—
      
—
      
147
      
25,164
      
3,125
      
2,004
      
—
      
30,440
  
Total commercial real estate loans
  
$
164,205
    
$
233,047
    
$
300,975
    
$
183,955
    
$
47,194
    
$
182,787
    
$
6,900
    
$
1,119,063
  
Current period gross charge-offs
  
$
—
    
$
—
    
$
65
    
$
—
    
$
—
    
$
22
    
$
—
    
$
87
  
                                                                 
Commercial - specialized:
                                                                
Pass
  
$
103,288
    
$
60,881
    
$
37,940
    
$
41,721
    
$
15,678
    
$
28,488
    
$
98,092
    
$
386,088
  
Special mention
    
214
      
—
      
1,600
      
—
      
—
      
—
      
—
      
1,814
  
Substandard
    
510
      
—
      
85
      
84
      
297
      
77
      
—
      
1,053
  
Total commercial - specialized loans
  
$
104,012
    
$
60,881
    
$
39,625
    
$
41,805
    
$
15,975
    
$
28,565
    
$
98,092
    
$
388,955
  
Current period gross charge-offs
  
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
  
                                                                 
Commercial - general:
                                                                
Pass
  
$
107,947
    
$
72,500
    
$
109,808
    
$
65,564
    
$
29,808
    
$
82,909
    
$
78,321
    
$
546,857
  
Special mention
    
—
      
—
      
960
      
554
      
—
      
499
      
200
      
2,213
  
Substandard
    
98
      
463
      
2,405
      
4,427
      
19
      
805
      
84
      
8,301
  
Total commercial - general loans
  
$
108,045
    
$
72,963
    
$
113,173
    
$
70,545
    
$
29,827
    
$
84,213
    
$
78,605
    
$
557,371
  
Year-to-date gross charge-offs
  
$
—
    
$
199
    
$
466
    
$
17
    
$
—
    
$
134
    
$
266
    
$
1,082
  
                                                                 
Consumer: 1-4 family residential:
                                                                
                                                                 
Pass
  
$
87,266
    
$
101,022
    
$
150,358
    
$
91,929
    
$
49,057
    
$
73,730
    
$
5,800
    
$
559,162
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
    
—
      
810
      
284
      
1,057
      
225
      
4,812
      
50
      
7,238
  
Total consumer: 1-4 family residential loans
  
$
87,266
    
$
101,832
    
$
150,642
    
$
92,986
    
$
49,282
    
$
78,542
    
$
5,850
    
$
566,400
  
Year-to-date gross charge-offs
  
$
—
    
$
—
    
$
121
    
$
51
    
$
—
    
$
3
    
$
—
    
$
175
  
                                                                 
Consumer: auto loans:
                                                                
Pass
  
$
70,621
    
$
72,009
    
$
76,412
    
$
25,869
    
$
7,293
    
$
1,931
    
$
—
    
$
254,135
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
    
21
      
28
      
82
      
179
      
4
      
25
      
—
      
339
  
Total consumer: auto loans
  
$
70,642
    
$
72,037
    
$
76,494
    
$
26,048
    
$
7,297
    
$
1,956
    
$
—
    
$
254,474
  
Year-to-date gross charge-offs
  
$
23
    
$
386
    
$
519
    
$
198
    
$
25
    
$
35
    
$
—
    
$
1,186
  
                                                                 
Consumer: other consumer:
    




















                 
Pass
  
$
23,665
    
$
12,969
    
$
14,790
    
$
5,477
    
$
1,232
    
$
5,382
    
$
1,324
    
$
64,839
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
    
—
      
—
      
8
      
47
      
—
      
42
      
—
      
97
  
Total consumer: other consumer loans
  
$
23,665
    
$
12,969
    
$
14,798
    
$
5,524
    
$
1,232
    
$
5,424
    
$
1,324
    
$
64,936
  
Year-to-date gross charge-offs (1)
  
$
469
    
$
308
    
$
245
    
$
43
    
$
29
    
$
145
    
$
18
    
$
1,257
  
                                                                 
Construction:
                                                
Pass
  
$
65,920
    
$
30,572
    
$
2,172
    
$
2,630
    
$
—
    
$
—
    
$
891
    
$
102,185
  
Special mention
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Substandard
    
—
      
1,190
      
480
      
—
      
—
      
—
      
—
      
1,670
  
Total construction loans
  
$
65,920
    
$
31,762
    
$
2,652
    
$
2,630
    
$
—
    
$
—
    
$
891
    
$
103,855
  
Year-to-date gross charge-offs
  
$
—
    
$
315
    
$
—
    
$
—
    
$
—
    
$
—
    
$
—
    
$
315
  

(1) Includes $457 thousand in charged-off demand deposit overdrafts reported as 2024 originations.

Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extensions, an other than insignificant payment delay, or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses. Typically, one type of concession, such as term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted. In some cases, the Company provides multiple types of concessions on one loan.
The following table presents the amortized cost basis of loans at the dates indicated that were both experiencing financial difficulty and modified during the years ended December 31, 2025 and 2024, by class and by type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also presented below (dollars in thousands):

   
Payment
Delay
    
Term
Extension
    
Rate
Reduction
    
Term
Extension and
Payment
Delay
    
Term
Extension and
Interest Rate
Reduction
    
Payment
Delay, Term
Extension,
and Interest
Rate
Reduction
    
Total % Class
of Financing
Receivable
  
December 31, 2025
                                          
Commercial real estate
  
$
—
    
$
124
    
$
—
    
$
601
    
$
—
    
$
—
      
0.07
%
Commercial - specialized
    
—
      
—
      
—
      
95
      
—
      
—
      
0.02
%
Commercial - general
    
—
      
900
      
403
      
4,048
      
—
      
7
      
0.81
%
Consumer:
                                                        
1-4 family
    
—
      
131
      
—
      
—
      
30
      
—
      
0.03
%
Auto loans
    
41
      
30
      
—
      
29
      
—
      
3
      
0.04
%
Other consumer
    
—
      
—
      
—
      
14
      
—
      
—
      
0.02
%
Construction
    
—
      
527
      
—
      
—
      
—
      
—
      
0.53
%
   
$
41
    
$
1,712
    
$
403
    
$
4,787
    
$
30
    
$
10
      
0.22
%
December 31, 2024
                                                        
Commercial real estate
  
$
74
    
$
65
    
$
—
    
$
—
    
$
—
    
$
—
      
0.01
%
Commercial - specialized
    
13
      
—
      
—
      
—
      
—
      
—
      
—
  
Commercial - general
    
—
      
428
      
—
      
11
      
29
      
47
      
0.09
%
Consumer:
                                                        
1-4 family
    
322
      
—
      
—
      
187
      
—
      
—
      
0.09
%
Auto loans
    
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Other consumer
    
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Construction
    
—
      
—
      
818
      
1,670
      
—
      
—
      
2.40
%
   
$
409
    
$
493
    
$
818
    
$
1,868
    
$
29
    
$
47
      
0.12
%

The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following presents the performance of such loans at the dates indicated that have been modified in the years ended December 31, 2025 and 2024 (dollars in thousands):

   
30-89 Days
Past Due
    
90 Days or
More Past Due
and Still
Accruing
    
Nonaccrual
  
December 31, 2025
                  
Commercial real estate
  
$
725
    
$
—
    
$
—
  
Commercial - specialized
    
—
      
—
      
95
  
Commercial - general
    
577
      
—
      
3,998
  
Consumer:
                        
1-4 Family residential
    
—
      
—
      
—
  
Auto loans
    
30
      
—
      
—
  
Other consumer
    
—
      
—
      
—
  
Construction
    
—
      
—
      
—
  
   
$
1,332
    
$
—
    
$
4,093
  
                         
December 31, 2024
                        
Commercial real estate
  
$
74
    
$
—
    
$
—
  
Commercial - specialized
    
—
      
—
      
13
  
Commercial - general
    
59
      
82
      
—
  
Consumer:
                        
1-4 Family residential
    
—
      
60
      
—
  
Auto loans
    
—
      
—
      
—
  
Other consumer
    
—
      
—
      
—
  
Construction
    
95
      
—
      
1,575
  
   
$
228
    
$
142
    
$
1,588
  
The following table presents the financial effects of the loan modifications presented above to borrowers experiencing financial difficulty for the years ended December 31, 2025 and 2024 (dollars in thousands):

   
Weighted-
Average Interest
Rate Reduction
    
Weighted-
Average Term
Extension
(Months)
  
December 31, 2025
            
Commercial real estate
    
—
      
9
  
Commercial - specialized
    
—
      
11
  
Commercial - general
    
9.10
%
    
7
  
Consumer:
                
1-4 Family residential
    
0.25
%
    
3
  
Auto loans
    
1.20
%
    
18
  
Other consumer
    
—
      
5
  
Construction
    
—
      
3
  
                 
December 31, 2024
                
Commercial real estate
    
—
      
12
  
Commercial - specialized
    
—
      
—
  
Commercial - general
    
0.82
%
    
14
  
Consumer:
                
1-4 Family residential
    
—
      
10
  
Auto loans
    
—
      
—
  
Other consumer
    
—
      
—
  
Construction
    
4.25
%
    
5
  

On an ongoing basis, the performance of modified loans is monitored for subsequent payment default. Payment default is defined as movement to nonperforming status, foreclosure, or charge-off. During the year ended December 31, 2025, the Company had $108 thousand in loans made to borrowers experiencing financial difficulty that were modified during the year that subsequently defaulted. During the year ended December 31, 2024, the Company had no loans made to borrowers experiencing financial difficulty that were modified during the year that subsequently defaulted. During the year ended December 31, 2023, the Company had $297 thousand in loans made to borrowers experiencing financial difficulty that were modified during the year that subsequently defaulted.

Upon the Company’s determination that a modified loan has subsequently been deemed to not be fully collectible, the uncollectible amount is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount.